Why the UK needs to nurture a fit-to-fund life sciences sector
Professor Chris Molloy, CEO of Medicines Discovery Catapult (MDC), writes about the state of the UK’s drug discovery sector, exploring economic challenges and what is needed to support the country’s rich life sciences talent.
We should all be proud of and inspired by the UK life sciences sector’s rich heritage. 25% of the world’s best-selling medicines have been discovered on British soil. Organisations of all sizes, from university spinouts and early-stage small and medium-sized enterprises (SMEs), to large pharmaceutical companies, each play an essential role in supporting the health and wealth of the nation.
State of the Discovery Nation
On 8 May 2024, MDC launched the State of the Discovery Nation report in partnership with the Bioindustry Association and the Association of the British Pharmaceutical Industry (ABPI)1.
The report shows the UK life sciences sector as vibrant, progressive, and successful in forging new paths in high-impact therapeutic areas and high-potential drugs. It continues to outperform its regional competitors, accounting for 35% of all life science start-ups created in Europe since 20122.
The sector has made good use of the flows of post-pandemic life sciences financing, generating more innovation than ever. Assets have diversified to address a broader range of health conditions. Great UK science has been drawn through the pipeline to the clinic and patients. Added to this is the promise of deployment of UK pension funds that will deliver significant future growth funding.
Our report shows that this success has also reduced talent pools, funds, and space at a time of increased costs and a tighter funding belt.
Economic headwinds
In 2022, financing for the sector fell to £1.7bn from £3bn in 20213. This was compounded by the increase in inflation over the period. While this economic instability remains, investors are less willing to invest in high-risk projects and organisations. Public funding is also not as easy to find or secure.
The global economic hardship also impacts supply chains. The companies we surveyed report a rise in supply chain issues and delays in equipment delivery, which further affects their cash flow.
Although these issues affect the whole sector, they are felt hardest by early-stage SMEs. They depend more on accessing public and private funding and partnerships to sustain and accelerate their discovery research. These companies play a crucial role in developing new drug and manufacturing pipelines nationally and globally, so we need to actively nurture them through a hard winter and well into warmer times to allow their roots to establish.
As the sunlight of optimism starts to appear, and in advance of the future pension-funded summer, we must provide active wrap-around support to our early-stage firms to ensure a robust and visible pipeline that is ready to absorb the money when it flows. We must also maximise today’s funding partnerships to co-develop these pipelines of high-quality, fit-to-fund companies.
Building talent within our industry
In an industry with innovation at its core, we need specialised skills and investible talent to support the development of novel therapeutics. The UK has outstanding life science talent; our skilled people have been deployed well, but the success of recent years means that we need more. Our sector says recruiting and retaining highly trained staff is increasingly hard, especially within seed and CRO companies. We are also short of management teams with an investment track record.
Our sector and its enabling agents must themselves develop the capacity to nurture and attract talent with a range of skills to meet today’s research needs, including cohorts with applied digital and data skills. This means we need hands-on training beds as well as educational institutions.
We must nurture and provide support to burgeoning management teams to help them be fit-to-fund: skills that are developed by experience and mentorship, not only by education.
We must be prepared to hire and offer in-role training to the right people at all phases and for all organisations in the medicines discovery pipeline, from technical expertise in specialist CROs to multidisciplinary skills within SMEs and venture building for university spin-outs.
Collaboration clusters
Skills are not the only requirement. The sector needs access to appropriate laboratory space and specialist equipment to generate novel science. With rising costs, these have been harder to come by, especially for smaller organisations.
To ease this pressure, many organisations, including universities, research parks, and science parks, provide laboratory space and facilities. Medicines discovery ‘clusters’– which exist across the UK – deliver huge benefits to the organisations within them. They offer a larger talent pool from which to draw and greater proximity to collaborators, incubators, accelerators, and regular networking events.
As such, the clusters subsequently attract further companies and investment, helping to nurture the UK’s drug discovery and life sciences sectors. However, to make the very best of innovation and to expand the UK science base beyond these clusters, it is essential that early-stage companies outside of these existing regions can access the same skills and expertise. Nationwide visibility of our sector will benefit us all.
Feeding future pipelines
Whilst there are challenges to overcome and active nurturing to perform, the UK life sciences sector has the essence of what it takes to excel. Our excellent heritage in medicines discovery serves as a reminder of what can be achieved.
Through direct, targeted, and coordinated action, we must help early-stage companies across the UK access the skills and enabling technologies they need. In tandem, investors must have maximum visibility of what the whole of the UK is producing.
A national purposeful fit-to-fund programme will bolster our life sciences sector, boost economic growth, and, most importantly, benefit patients.
References
- https://md.catapult.org.uk/publications/state-of-the-discovery-nation-2024/
- https://www.gov.uk/government/statistics/bioscience-and-health-technology-sector-statistics-2021-to-2022/bioscience-and-health-technology-sector-statistics-2021-to-2022